In today's beleaguered U.S. shrimping industry, a family business fights to stay afloat.
(FORTUNE Small Business) – On a sweltering Saturday morning at the farmers' market in downtown Baton Rouge, Kim Chauvin stands in her booth awaiting customers. Behind her are four large buckets of shrimp, "certified Cajun" as she likes to call them. On a table in front of her are a scale and two framed photographs of Mariah Jade, the 73-foot shrimping boat her husband, David, built nine years ago. The boat is named after their 9-year-old daughter, who is sitting on the bed of a gray Chevy Silverado counting dollar bills and stacking them neatly into a metal box.
The aisles are bustling as vendors peddle local lamb, tamales, milk, tomatoes, and other products. Mariah Jade Shrimp, based in the small bayou town of Chauvin, La. (no relation), is selling head-on jumbo shrimp for $8 a pound, peeled medium shrimp for $7. But Chauvin says it's not only about the money. "Sometimes I don't turn a profit here at the market," the 37-year-old admits. "But I'm educating people about fresh domestic shrimp."
Take a drive along the Gulf coast these days and you'll see evidence of Chauvin's frustration: rows of abandoned and boarded-up shrimping boats crowding the waterways like beached whales. A storm of bad breaks--foreign competition, high fuel costs, and tightening environmental regulations--is slowly sinking the U.S. shrimping industry. The Chauvins wonder whether the Mariah Jade is floating toward a similar fate.
The Chauvins' best year was 2000, when they sold $500,000 worth of shrimp. Last year they brought in $175,000 with the same effort. As the Chauvins see it, the problem is simple: Foreign shrimpers, mostly from Asia and Latin America, enjoy an unfair competitive advantage. In the U.S. shrimpers trawl for crustaceans in the open waters. Abroad, shrimp is farmed in ponds on large coastal tracts by laborers earning well below a living wage. Despite protests from environmentalists that shrimp ponds poison mangroves and ruin delicate ecosystems, nearly 90% of the shrimp eaten in the U.S. comes from Asia and Latin America, up from roughly 50% in the mid-1970s. Meanwhile, wholesale prices in the U.S. have slid 40% in the past five years.
"U.S. shrimpers are going to have to figure out a way to differentiate themselves from their foreign rivals," says Jeffrey Lotz, professor of coastal sciences at the University of Mississippi's Gulf Coast Research Laboratories. "To survive, they'll probably have to start marketing domestic shrimp as something other than a commodity rather than competing directly on price with the imports." Domestic shrimp does have its selling points: It is widely held to be fresher, better tasting, and free of antibiotics and other chemicals sometimes used on farm-raised seafood.
Kim's father and grandfather were shrimpers, as were David's, and neither family ever expected to get rich trawling for "pink gold." But the Chauvins have always believed there is something noble, even magical, in work governed by moon and tide. High school sweethearts, Kim and David married in 1986 with a vision of shrimping into their old age. By day, David worked on his father's boat, and by night he toiled in the backyard building his own. Kim sold the catch--to neighbors, grocers, restaurants. Their oldest son, David, 16, saved his money from shrimping with his father and grandfather and recently purchased a 65-foot boat from a retiring shrimper for $125,000. "He wants to trawl," his mother says. "It's in his heart." She shrugs her shoulders, and a long sigh follows. "Frankly, it's a little scary."
The Chauvins are not optimistic about getting any relief. Three years ago they joined with 13,000 other beleaguered shrimp-boat owners of the Southern Shrimp Alliance and won a lawsuit against foreign rivals in Brazil, China, Ecuador, India, Indonesia, and Thailand. The suit claims that those countries are driving them out of business by selling shrimp in the U.S. at below-market prices. Under a 2000 federal trade law, funds generated from increased tariffs would go to companies that joined the lawsuit. The Chauvins hope to receive as much as $200,000, although they have yet to see a payment.
The Chauvins know they can't count on government largesse alone. To survive as shrimpers, they'll have to learn how to tap into new markets. A couple of years ago Kim enrolled in an entrepreneurship course at Nicholls State University in Thibodaux, La., and was inspired to think more broadly. The Chauvins are starting to shop their shrimp more aggressively to natural-food cooperatives, whose customers are more likely to place a higher value on quality than price. The couple also started paying hired hands to sell Mariah Jade shrimp by the roadside. A new website, mariahjadeshrimp.com, is starting to generate orders from around the country. "Shrimping and trawling are a way of life," the site tells visitors, "not just a paycheck." And preserving that lifestyle is going to take a lot of heavy hauling.